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51job, Inc. (NASDAQ:JOBS)

Q1 2011 Earnings Call

May 5, 2011 09:00 PM ET

Executives

Linda Chien – Assistant VP, IR

Rick Yan – President and CEO

Kathleen Chien – Acting CFO and COO

Analysts

Alicia Yap – Citigroup

Wendy Huang – Royal Bank of Scotland

Jenny Wu – Morgan Stanley

Justin Diddams – Citigroup

Operator

Good morning and good evening ladies and gentlemen thank you for holding. Welcome to the 51job, Incorporated first quarter 2011 conference call. At this time, all participants are in a listen-only mode. After the presentation there will be an opportunity to ask questions (Operator Instructions). I will now hand the conference over to Ms. Linda Chien, Assistant Vice President of Investor Relations. Thank you, Madam. Please go ahead.

Linda Chien

Thank you all for attending this teleconference to discuss un-audited financial results for the first quarter ended March 31, 2011. With me for today’s call are Rick Yan, Chief Executive Officer and Kathleen Chien, Chief Operating Officer and Acting Chief Financial Officer. A press release containing first quarter 2011 results was issued earlier today and a copy may be obtained through our website at ir.51job.com.

Before we begin, I would like to remind you that during this call, statements regarding targets for the second quarter of 2011, future business and operating results constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the Private Securities Litigation Reform Act of 1995.

These statements are based upon management’s current expectation and actual results could differ materially. Among the factors that could cause actual results to differ are the number of recruitment advertisements placed, sales orders received and customer contracts executed during the remaining weeks of the second quarter of 2011, any accounting adjustments that may occur during the quarterly close; fluctuations in the value of the Renminbi against the U.S. dollar and other currency; behavioral and operational changes of customers in meeting their human resource needs as they respond to evolving social, economic and political changes in China as well as stock market volatilities; introduction by competitors of new or enhanced products or services; price competition in the market for the various human resource services that the company provides in China; acceptance of new products and services developed or introduced by the company outside of the human resources industry and fluctuations in general economic conditions.

For additional information on these and other factors that may affect the company’s financial results, please refer to the risk factor section of the company’s filings with the Securities and Exchange Commission. 51job undertakes no obligation to update targets prior to announcing final results for the second quarter of 2011 or as a result of new information, future events or otherwise.

Now I’ll turn the call over to Rick.

Rick Yan

Thank you, Linda. And welcome to today’s call. I will begin with highlights of the first quarter, followed by Kathleen with her detailed review of our financial results. I will then discuss current market conditions and recent developments. Finally, we’ll open the call to your questions.

Results for the first quarter came in ahead of guidance as the positive economic climate and robust hiring activity in China throughout demand for our services. We reported total revenues of RMB 325 million or approximately $50 million, an increase of 28% over the first quarter of 2010. We saw solid revenue growth in each business area. The momentum of our online services business remained strong with online revenues increasing 57% year over year.

We have employers across all geographies utilizing our established sales office network to further penetrate existing markets and our Wuhan call center to serve employers in new cities. This two pronged approach has enabled us to acquire new customers more effectively and efficiently than ever. Our print advertising business also performed well in the first quarter. Although, we have discontinued publications in six cities since the beginning of 2010 through the first quarter of 2011; print revenues were better than expected and decreased by 6% due to the exceptionally strong seasonal demand in the post Chinese New Year period.

In our other HR services business we make steady progress in continuing to gain customer attraction. Revenues for the other HR services increased 25% led by growth in outsourcing and training services. While we are very pleased with our top line the greater accomplishment of the first quarter was the meaningful margin expansion that resulted from the revenue of the performance. The record margin efforts highlight the powerful economies of scale and scope we have built into our service model.

Through unrelenting operational discipline and a consistent focus on efficiency improvement which drove gross margin to 70% and operating margin to 35% despite absorbing higher employee compensation expenses and investing in product development and technology innovation. Since our inception 13 years ago we have not wavered from our guiding management principle to realize sustainable profitable growth for our shareholders. We believe this first quarter financial results reflect our continued progress towards this goal.

I would now turn over the call to Kathleen for more detailed financial review.

Kathleen Chien

Thank you, Rick. Revenues for the first quarter totaled RMB325 million, a 28% increase compared to the same quarter in 2010. Our online revenues for the first quarter were RMB173 million, an increase of 57% compared to the same quarter in 2010. The number of unique employers using our online services increased 38% year over year to nearly 155,000 companies in the first quarter due to the strong market demand and our customer acquisition efforts. We also saw a 14% increase in the average revenue per online customer compared to the year ago quarter as employers faced greater competition for talent and thus purchase more services to meet their recruitment targets.

Print advertising revenues decreased 6% to RMB86 million compared with RMB92 million in the first quarter of 2010. The decline was primarily due to the discontinuation of print operations in certain cities over the past year as well as the resulting decrease in page volume. Print advertising pages in the first quarter of 2011 decreased 28% to approximately 2200 pages compared with about 3100 pages in the prior year’s quarter. However, the page volume decrease was largely offset by the higher revenue per page assisted by the strong seasonal demand or average revenue per page increased 31% due to greater contribution from the higher priced cities as well as an increase in print advertising rates in a few cities in the first quarter of 2011.

In line with the historical trends we expect print revenues in the second quarter to decline in both absolute terms and as a percentage of total revenues. We have also terminated the publication in the city of Kunming in April. This reduces the number of cities in which we operate print operations to 15. Our HR services revenues grew 25% to RMB65 million in the first quarter of 2011. We achieved solid growth in our outsourcing and training businesses due to the greater customer acceptance and demand.

Gross profit increased 39% year over year to RMB215 million and gross margin increased to 70% from 64% in the first quarter of 2010. The margin expansion was primarily due to the process improvements and our operating efficiency. Included in cost of services in the first quarter was share based compensation expense of RMB1 million, though the marketing expenses increased approximately 26% year over year to RMB71 million in the first quarter of 2011 mainly as a result of higher employee wages, commissions and bonuses. Included in sales and marketing expenses were share based compensation expenses of approximately RMB0.8 million in the first quarter.

For the second quarter we will be stepping up advertising and brand building activities but we expect sales and marketing expenses to be within the historical range of 25% to 30% of net revenues. G&A expenses for the first quarter were RMB37 million down slightly from the year ago quarter. Share based compensation expense included in G&A in the first quarter was RMB4.3 million, operating income for the first quarter of 2011 increased 77% to RMB 107 million compared with RMB61 million in the same quarter in 2010.

Our operating margin expanded to 35% compared with 25% in the first quarter of 2010. Net income for the first quarter increased 82% to RMB92 million compared with RMB50 million in the same quarter of 2010. Fully diluted earnings were RMB1.55 per common share which is equivalent to $0.47 per ADS. Excluding share based compensation expense, foreign currency translation loss and their related tax impacts our non-GAAP adjusted net income increased 78% year over year to RMB101 million in the first quarter. Non-GAAP adjusted fully diluted earnings per common share were RMB1.71 or $0.52 per ADS.

In late April, we issued stock options to employees and directors at their market value. As a result we expect that share based compensation expense will increase from RMB6 million in the first quarter to approximately RMB10 million in the second quarter. Looking at our balance sheet, our cash and short-term investments increased to RMB1.7 billion or approximately $265 million. Short-term investment consists of certificate of deposit with original maturities from three months to one year. Now I will turn the call back over to Rick.

Rick Yan

Thank you, Chien. Our observations of hiring trends and employer behavior that’s just slightly in 2011 continue to indicate robust market demand. We saw a strong uptick in job listings across the board in a post Chinese New Year period, picking at more than 2 million active job positions. The competition for managerial talent and experienced workers in particular has also become increasingly fierce among employers driving wages increased and greater spending on recruitment services. Amid a backdrop of these favorable market conditions we roll out a new rate card online services which went into effect on April 1. In addition to the introduction of new services and packages we instituted a number of price adjustments which very widely depending on product and city.

As existing customers already under contract will not be subject to these new prices until renewal, the impact of the new rate card would be limited in the second quarter. The length of our online services contracts typically ranges from one month to one year. Therefore, we expect to gradually realize mid-to-high single digit increase in average revenue per customer from the new pricelist through 2011.

While we are taking opportunity to capture some pricing upside we are staying aggressively in our customer acquisition and geographical expansion efforts. In late April, we launched seven new channels to our website adding 13 cities serviced by our Wuhan call center. We now provide dedicated sales coverage and support for our online products to employers in 56 cities. We will further increase our national footprint this year.

Recently, there have been media reports regarding new and potential entrance into the online recruitment space in China. However, to-date the competitive landscape feels generally unchanged to us as we maintain and establish a widely acknowledged market leadership position, to reach knowledge and relationships we have into hundreds of thousands of HR departments is unparalleled. We have leveraged these assets into becoming a trusted partner to corporations across all the human resources needs, not just providing them with an advertising platform.

We know how to compete, we know how to execute and we know how to monetize. With ample financial resources backed by strong balance sheet in our highly experienced call management team, we are confident that we can continue to win. Now turning to our guidance, based on current market and operating conditions, our total revenue target for the second quarter of 2011 is in estimated range of RMB325million to RMB335 million which will be a 26% year-over-year increase at the midpoint. Our estimated non-GAAP fully diluted EPS target is between RMB1.6 to RMB1.7 per common share.

Please note that, if non-GAAP EPS range does not include share based compensation expense, foreign currency translation loss know their related tax impact. As Kathleen mentioned earlier, our share based compensation expense is expected to increase to approximately RMB10 million in the second quarter. This guidance reflects our current forecast which is subject to change. In addition, seasonality in our businesses, we remind you that sequential quarterly comparisons can be misleading, and we believe year-over-year comparisons are more applicable for measuring our financial performance.

Our priorities going forward are crystal clear. We are focused on growing our customer base, increasing revenue opportunities, investing in new product development and delivering solid returns to our shareholders. We believe the stock we have had in 2011 provide further confirmation that we are executing the right strategic plan to develop the most powerful brand in human resources services in China.

That concludes our presentation, we will be happy to take your questions at this stage. Operator?

Question-and-Answer Session

Operator

Thank you, ladies and gentlemen at this time; we will now begin our question-and-answer section. (Operator Instructions). The first question has come from Ms. Alicia Yap from Citigroup. Please go ahead with your question, thank you.

Alicia Yap – Citigroup

Kathleen and Linda congratulations on the strong set of results. My first question is regarding the pricing trends for your online business. So ARPU per employer for the first quarter increased about 14% year-over-year, I think this was actually the highest percentage increase in your operation. Can you help us understand was that mainly due to just the matter of demand environment and the pricing adjustment that you mentioned actually just started in April right? So there is nothing related to the pricing adjustment right? Just wanted to make sure?

Kathleen Chien

Yes, if you look at actually our Q4 average revenue per customer that’s actually pretty much in line with what it actually was for the first quarter this year. So you are right in a sense that yes we will have a new rate card in April so we expect to capture more of that actually in the second quarter. Although, as mentioned already by Rick that because of the fact that when people come they are not subject to new prices until they come up with new – we do have expectation that this will be something that will be filtered out through the year.

Alicia Yap – Citigroup

And when you mentioned about mid to high single digit increase for the pricing adjustment and how should we thinking about translate into the year over year increase for your overall blend to basis?

Kathleen Chien

I guess from our perspective I think we are going to when we say it’s a single digit we are actually using the Q1 numbers as the base to think about it if you will. And so I guess from that perspective I would then use the Q1 number as the base to work off rather than a year over year.

Alicia Yap – Citigroup

I see so is that mean or I say the second quarter increases will be small and then a gradual increase in towards the 3Q and 4Q?

Kathleen Chien

Yes, to a degree yes.

Alicia Yap – Citigroup

Okay. And second question is regarding the sales and nothing in trend I assume competition probably has resumed their aggressive marketing campaign to drive the market share. Any pressure that you have seen in terms of your sales and marketing cost from price on both the online channels or things like that? And will you actually step up your spending, I think you have mentioned you are actually going to step up the spending but then would you be actually seen more vigilant in some of the marketing initiatives?

Kathleen Chien

I would like to think that we have always been very vigilant because China has been very competitive market and we have been in the market for long time. We don’t see the competitive environment is changing too much, but we do believe that reaching out to the newer cities as well as the fact that Q1 had the sort of the January kind of lull, if you will, usually happens pre-Chinese New Year. So, in terms of Q2 then I think we will be more consistent in kind of having our activities throughout the quarter if you will.

So I think certainly reaching out to the new city still remains to be priority that we will actually be focusing on and I think the sales and marketing approval that will actually add to the longer term development. So yes we will be more aggressive on that but I think in terms of the cities that everyone have been in for a long time I don’t think that competitive landscape is changing too much. Though I think we will continue to maintain the efforts but I don’t see that it will be meaningfully different.

Operator

Thank you and the next question has come from Ms. Wendy Huang from Royal Bank of Scotland. Thank you Ma’am, please go ahead with your question.

Wendy Huang – Royal Bank of Scotland

I understood that we should focus more on the (inaudible) kind of results. However, I want if you can still give me some color on the sequential trend that we have seen in Q1 especially for the print advertising and also as HR business. How much is it actually attributable to the different seasonality and how much is it actually attributed to the strategic commitment changed to certain business segments such as print business is this your thinking in Q1, if we look at a sequential trend that print has rebounded quite strongly while the other HR actually the kind of sequential – actually my previous understanding from you guys is as HR shouldn’t have a strong seasonality, so if you can put more colors that will be grateful thank you.

Kathleen Chien

Wendy, good question to bring up to back to seasonality again. I think on the print seasonality I should relate more to the Q1 impact. If you see every year in the past that Q1 tends to be the strongest quarter really for print. So the print seasonality actually kind of falls into Q1 and then the seasonality related to other HR? When we discussed Q4 results when we release them in late February, we talked about the fact that there is actually a lot of campus related recruiting that is actually very seasonal. So that seasonality kind of falls into Q4. So I guess with the different parts of the business the seasonality patterns are little bit different if you will.

So, which is why we kind of always try to remind people that we do have seasonality although for the different businesses, the seasonality now is a little bit different throughout the year.

Wendy Huang – Royal Bank of Scotland

So in that case is it so to say that among your other HR business the campus recruitment accounting for like more than one-third of the other?

Kathleen Chien

No, I am just saying that in the fourth quarter that tends to be where the bulk of campus revenue happened during the quarter if you will. But I am not saying necessarily that it actually counts for more than one-third of business every quarter because it’s a very concentrated period of time where recruiting happens on campus if you will. It’s not every month the same activity is what we were saying.

Wendy Huang – Royal Bank of Scotland

Sure. Also can you give me more may be more color on your 2Q guidance which is actually implying lower year over year revenue growth if we compare it to the previous years and also how we look at a different seasonality across different segments for Q2?

Kathleen Chien

Again, I would say that in terms of the seasonality I mean we look at year over year comparison, so I mean we expect that Q1 with a very, very strong print advertising is going to come down very significantly in Q2 because if you look at the pattern every year that has been the case. It will be probably more marks this year than previous year because of the fact that we continue to take some steps sometimes to actually make some decisions to terminate certain cities and to be honest I think Q1 some of our performance was really driven by the seasonal demand related print advertising. So we actually were above our guidance for Q1 and I think a lot of that was driven by the fact that print performed much stronger than we had expected.

Wendy Huang – Royal Bank of Scotland

But for the Q2 guidance I think it’s inclining around 25% year over year growth versus 28% year over year growth you achieved in Q1.

Kathleen Chien

Actually 26% at the midpoint. So I think it actually not got meaningfully different.

Wendy Huang – Royal Bank of Scotland

Yes. But given that your online business is picking up strongly giving your strategic focus there and also online is taking a bigger share of the total should we expect a momentum over been as to actually pick up stronger rather than maintain the stand or slowdown into the Q2?

Kathleen Chien

As mentioned online is a big part of our portfolio but we also need to account for the other revenue streams, growth rates and some of that will actually be in decline for the second quarter. So that is actually a blended growth rate if you will though.

Wendy Huang – Royal Bank of Scotland

And lastly can you give more color on the operating margin? In Q1 your operating margin again hit a historical high both gross margins and operating margin extended quite strongly. So I wonder how much (inaudible) do to have to improve your margin further and well the Q1 surge is just a temporary impact and so we see some normalization in Q2 even margin level? Thank you.

Kathleen Chien

It’s a good question, we have given our guidance for Q2 so you can see that we are actually looking at an EPS level that’s actually fairly similar I mean slightly lower than what was actually achieved in Q1 if you will. We talked about the fact that we will be stepping up some marketing and sales efforts in the second quarter. So I think that’s where we are I think we will continue to work hard at trying to raise our margins versus prior year and I think our comparison is that basis.

So I think right now we are just taking it quarter by quarter and I think we already actually achieved a new high for the first quarter. So we hope that we will be able to maintain a momentum but we don’t want to actually step away from increased investments in those marketing though. So always just like that because first quarter sales and marketing as a percentage of sales, our net revenues that is actually lower than the historical trend of the 25% to 30%. So we do expect to pick up in that category in the second quarter in spending.

Operator

Thank you and the next question has come from Jenny Wu from Morgan Stanley. Thank you Madam, please go ahead with your question.

Jenny Wu – Morgan Stanley

Kathleen and Linda congratulations on strong quarter. First question is I think you mentioned about the competition your position in this industry. Just wondering would you please give us more highlights on your competitive edge over the peers including the (inaudible)? Thank you.

Kathleen Chien

Let me jump in first and I am sure Rick will have something to add. To be honest I think these – Baidu are so called potential entrance to the market who are not meaningful players in the market at all this time. Renren launched the so called HR Recruiting service this last March is been over a year since they announced that move but they have no attraction as far as we understand from a customer perspective because we never run into them really at the customer state. Baidu just announced that they wanted to actually get into the recruiting business in April. It’s been about I guess less than a month since they made that announcement, to be very honest we have not seen again too much efforts at the front end from the customer sight in terms of their activity.

We understand that they have actually recruited away lot of (Zhaopin’s) sales management personnel and that I don’t know what the situation is (Zhaopin) on that front did but certainly they might be experiencing some more difficulties versus what we are seeing in the marketplace. But at this point in time we do not believe that they have made meaningful inroads or they have made meaningful investments in this particular space in terms of understanding customers and providing a solution to customer’s needs.

So that’s what we understand of their situation at this point. And I think Rick will have something to add here.

Rick Yan

Yes. I think I will just add that for Renren, we have not seen an attractive kind of value proposition to customers in a sense like what they offer and Baidu they are basically doing the same approach as what the current providers are offering they are not introducing any innovations or different approach to what is already being offered in the market. So at this stage, we have not seen any impact on our business, we have not even heard from our customers that they are considering them as alternatives.

Jenny Wu – Morgan Stanley

And I was just wondering for your online customer acquisition was there some momentum and do you have any sense that online eventually would be eventually about on that or have you already seen that happen?

Kathleen Chien

This is a very good question actually. I think we have always been aware that they could be implementations in terms of inventory but we have also been created and trying to introduce new options at different times throughout our history. So I think we are always looking at the utilization, we are also looking at creating options where there could be new supplies if you will to the pool. So I think at this point in time we do not feel that that will be a bottleneck to our growth. We will continue to monetize situation but as we continue to introduce new products and services and channels I think we are always introducing and creating new options to serve our customer needs.

Jenny Wu – Morgan Stanley

So the number you give us as your unique customers for 1Q, do you have the number for – in the past what’s accumulative unique customers?

Kathleen Chien

Well, I think let me just take a real quick look if you give me a minute here, that’s about 215,000.

Jenny Wu – Morgan Stanley

215,000.

Kathleen Chien

215.

Jenny Wu – Morgan Stanley

Okay. What’s the year over year interest here?

Kathleen Chien

I am sorry, this is the full year 2010 but if you are looking at year over year we have increased in the first quarter 38%.

Jenny Wu – Morgan Stanley

So what’s the growth momentum that you are expecting now?

Kathleen Chien

We have always said that we are looking at least 20% to 30% customer growth every year. We have actually overachieved that in the first quarter already and we have achieved that last year quite significantly given that 2009 was a lower comp if you will. So I think we will continue to look at some more levels it is what we would like to see.

Operator

Thank you. (Operator Instructions) And the next question will come from Ms. (Natalie) from SIG. thank you Ma’am please go ahead with your question.

Unidentified Analyst

Well I have a couple of follow-up questions. Well, first your question for the print ad business, like we see a big increase in print pages in our pool. Well, you mentioned in the preparation remark that the ad increase is impart due big contribution from tier one cities and increased advertising rate. So I am just wondering the Future where should we see in this business line, should we see continued increase in print pages and ARPU or should we expect that should go down?

Kathleen Chien

On a year over year basis, we actually decreased our page count. So let me just make sure that our understanding is inline. But we actually decreased our page count year over year. Our average revenue per page did increase and that’s because the contribution makes us change as a result of some of the closures and terminations throughout the year. I did not actually say that the contribution actually is from tier one cities as being a driver for the price uptick, but we did actually institute some price changes in certain of the cities during the first quarter.

So that was the reason why that the actual revenue per page increased.

Operator

(Operator Instructions). And the next question comes from Ms. Wendy Huang again from Royal Bank of Scotland. Thank you Ma’am, please go ahead.

Wendy Huang – Royal Bank of Scotland

It seems we have more time today. I just wanted if you can give more detail on all price increase that you just roll out and what’s the customer’s acceptance of feedbacks so far and when you were – what kind of product increased by what degree or what percentage or what kind of consideration are you taking into account? And what kind of product or customers do you see have the higher price elasticity? Thank you.

Kathleen Chien

Wendy it’s been about a month since we put that through. So I don’t think we have a full picture in terms of all that you mentioned about elasticity and why not because I think it’s a very complicated situation to look at because at different point in time people make different selection based on their budget, the current requirement. But having said that what we do was actually we looked at host of factors when we actually try to make the adjustment to our pricing and that included part of sort of what we saw was the again orders situation if you will. So typically when we talk to special larger customer to have more visibility and longer term planning, they give us a sense of what type of product they would like to actually purchase during the year. Also we took a look at what the sort of the order book will look like for the different product line and try to assess what the demand profile is for each one.

In terms of the price changes that caused the different product line is actually to be honest it’s a very big range of variance including something we did not make changes to and then to certain other ones when we made double digit price changes to. So it’s a pretty big mix bag, so it’s kind of hard to try to capture that in a sense or two. But I think what we would like to do really ultimately is that we have said that we are looking at getting sort of mid to high single digits that’s what we realized. And that’s going to be combination of the fact that we raise our records, we also look at what kind of discounting and packaging that we actually give to our customers to get to the final yield of that objective of the mid to high single digits.

And so that’s kind of what we are looking at. Again, because actually by city, by product the variance was so high, it’s very difficult to kind of capture that into a sentence or two. So that’s kind of where we are on that. But so far I would say that I do not feel that customers have because of that issue we are not able to come to an agreement with us in terms of what they would buy and what’s the pricing that will ultimately buy the product that they would like to buy if you will.

So I think that we are making the transition, we are putting that through so I don’t feel that it’s becoming issue in terms of deterring our customer acquisition efforts.

Wendy Huang – Royal Bank of Scotland

Okay. In terms of the new online customers that you are getting are you seeing majority of those additional customers coming from the new channels that you have added or is still coming more from the organic growth from the existing online channels?

Unidentified Company Speaker

We are getting a lot of customers from the cities that we were already in before certainly so it’s not just from the new cities.

Operator

Thank you and the next question comes from Mr. Justin Diddams of Citigroup. Thank you sir, please go ahead.

Justin Diddams – Citigroup

Just couple of questions to clarify some of the growth in the first quarter. Is it possible for you to give us a like for like growth number which excludes the new city launches? So give us an idea of how your existing cities have been growing as opposed to the growth from the new launches?

Kathleen Chien

We do not actually do breakouts by cities. So unfortunately I would be not able to provide that information. But certainly we do not see that the growth is just coming from the new cities because the comment I just made to Wendy’s question a little bit earlier. We are seeing new customer acquisitions in these existing cities as well as the new cities.

Justin Diddams – Citigroup

Okay, may be ask you to different ways. Are you seeing your existing client by spending more money review or is it just new clients coming on, can you give us an idea of what your like for like existing clients what they increase their budgets by?

Kathleen Chien

To be honest I think it’s unfair to answer that question because customers actually do not necessarily have the same demand profile year over year. So it’s not fair to say that because someone spend lesser or more that’s really result of what we are doing in the marketplace that really ties to their recruiting targets and budgets for the year. So I don’t think that we would think about answering a question I guess in that way because we don’t cut the data that way. But again like I said we have actually certainly launched a number of new cities in the last year and then including April we also made some new launches. But overall, we have large portfolio of cities that we have been in the past that can contribute and grow and that’s a very big part of our growth just as much as the new cities that we are going to putting up which are going to be the things that we see for the future.

Justin Diddams – Citigroup

Okay, I will give third question a shot. For the second quarter guidance are you willing to give us a number for online growth? What the guidance is when you breakout the decline in printing and the other revenues what the outdoor with the online is going to be?

Kathleen Chien

We don’t I guess practice breakout that goes by different segments when we actually give our guidance. So, that is our practice.

Operator

Thank you and Mr. Yan, there are no further questions at this time. Please continue with any final comments. Thank you.

Rick Yan

Thank you for joining us today. We look forward to speaking with you next quarter and we value your continuous support of 51job. Thank you and bye-bye.

Operator

Ladies and gentlemen this concludes the 51job first quarter 2011 call. Thank you for participating, you may now disconnect.

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